Which Measure of Central Tendency Is Preferred to Describe a Distribution

question 40

Multiple Choice

Which measure of central tendency is preferred to describe a distribution that is significantly skewed?

• A) mean
• B) variance
• C) median
• D) mode

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Definitions:

Acid-Test Ratio

A financial metric that measures a company's ability to pay off its current liabilities with its quick assets.

Current Ratio

A metric used to evaluate a corporation's capability to meet obligations that are short-term or due within a year.

Short-Term Investments

Investments that are readily marketable and intended to be converted into cash within the next year or operating cycle, whichever is longer.

Total Current Liabilities

Total current liabilities are the sum of all debts and financial obligations a company owes within the next year.